Investing

A key difference between saving and investing is

• Saving is for everyone, investing is for the wealthy

• Your money is insured when investing, it is not in savings

• Investing has a guaranteed return, savings does not

• Saving is for emergencies & goals, investing is for long-term wealth

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Why is compound interest more beneficial than simple interest? (TWO ANSWERS)

• Your money grows faster when it is compounded

• You earn interest on your interest

• Fees for compound interest are greater than simple interest

• Compound interest is hard to calculate, so fewer use it

Which would be considered the highest risk investment type?

• Stock

• Mutual Fund

• Bond

• Money Market Account

The relationship between risk and return can be stated as

• Higher risk indicates higher return

• Higher risk indicates lower return

• Lower risk indicates higher return

• No relationship exists between risk and return

Which is NOT a stock market index?

• New York Stock Exchange

• Dow Jones Industrial Average

• S&P 500

• Nasdaq

How can you make money on stocks? (TWO ANSWERS)

• A capital gain

• Interest

• Dividends

• Holding the stock at least 3 years

The face value of a bond is called

• Principal

• Coupon

• Par Value

• Maturity Date

Which is NOT true about Initial Public Offerings (IPOs)?

• IPOs occur when a private company becomes publicly traded

• All companies file an IPO

• The value of an IPO can be difficult to measure

• When an IPO occurs, a company raises money to grow the business

1. A tax deferred retirement investment fund for employees of for profit companies.

• 401(k)
• 403b
• 457
• 402(a)

This picture describes markets that have been...... 

• Doing well
• Doing poorly
• Not changing